Deepwater Drilling Risk Mitigation and Safety August 11, 2010 - - PowerPoint PPT Presentation

Deepwater Drilling Risk Mitigation and Safety

August 11, 2010

Outline

 Risk Mitigation  Commence Additional Deepwater Operation in the GOM  Brief Overview of Different Drilling Operations

 Exploration Drilling  Appraisal / Sidetrack / Development Drilling

 Risk Mitigation Tactics  Recommendations

2

3

Definition of Risk

 Hazard: A Source of Danger; a Possibility of

I ncurring Loss or Misfortune

 A Venture Undertaken without Regard to Possible

Loss or I njury

 Expose to a Chance of Loss or Damage

4

Treatment of Risk

 Avoidance – A Decision to Not Become I nvolved I n,

• r Action to Withdraw from, a Risk Situation

 Optimization – A Process to Minimize the Negative

and to Maximize the Positive Consequences and their Respective Probabilities of Occurrence

 Transfer – Sharing with Another Party the Burden

• f Loss or the Benefit of Gain, from a Risk, and the

Measures to Reduce the Risk

 Retention – The Acceptance of the Burden of Loss,

• r Benefit of Gain, from a Risk

Failure to Manage Risk

 The Risk will Manage Us  Unintended Consequences

 Loss of Jobs  Loss of Domestic Production  Loss of Royalties for Federal, State and Local Governments  Loss of Allocation of Resources from Operators

 The Goal Should be to Determine an Appropriate Level of

Risk Acceptance and then Design Mitigation and Management Plans, Procedures, and Equipment for the Risk

5

Deepwater Operations Not Affected by the Moratorium

 I ntervention or Relief Wells for Emergency Purposes,

I ncluding the Two Relief Wells Related to the Ongoing Deepwater Horizon I ncident

 Operations that are Necessary to Sustain Reservoir

Pressure from Production Wells

 Workover Operations  Waterflood, Gas I njections, or Disposal Wells  Drilling Operations or Other Activities that are Necessary

to Safely Close or Abandon a Well, or to Accomplish Well Completion Operations

6

Varying Risk for Different Deepwater Operations

 Deepwater Exploration Wells

 Well designs are characterized by seismic and other geophysical

models

 Reservoir pressure and hydrocarbon composition are estimated

from analogous reservoirs

 The range of uncertainty is only as good as the model calibration

 Deepwater Appraisal and Development Wells

 I ncludes sidetracks, development and production wells  Well designs are characterized by actual data acquired during

exploration drilling

 Reservoir pressures and hydrocarbon composition are known from

sampling

 Real time drilling data is used to calibrate seismic models, reducing

uncertainty

7

What Have We Learned?

 Do We have Enough I nformation to Commence Additional

Deepwater Operations from:

 I nformation learned from testimony and investigation of the

Deepwater Horizon events to date

 Added safety measures required in NTL 2010 - 05 and 06  A culture that emphasizes safety 24 hours a day, 7 days a week,

365 days a year

 Rigorous BOEM rig inspections  Third party reviews of well design  I nternal reviews of Company deepwater operations

 Higher Risk Operations May be Evaluated on a Well-by-

Well Basis Pending the Findings of the Presidential Commission

 Exploration wells to previously un-drilled reservoirs  High pressure and high temperature wells  Well interventions or well deepening to un-drilled reservoirs

8

Drilling and Completions Risk Workflow

Pre-Response Risk Rating Matrix for: SANTA CRUZ MC519#1 COMPLETION Date

24-Jun-10

C.9 Riser collapse Perf.11 Guns fire on Surface C.2 BOP and Riser Part Damage; Riser joint fatigue C.4 Drop riser / BOP while running C.7 Trip to Production String C.1 Smart Well Leak Perf.12 Premature Explosion C.13 Space Out Issue/Orientation Mort.5 NTL C.6 Ram Damage C.20 Test Seal C.33 Lock Down C.8 BOP Control system failure C.10 Tensioner ring seizes C.19 Well Control C.21 Can not Burp C.32 Line break C.17 Run offline, anticipation of

• btaining Permit

(Pulling BOP is the C.24 Damage Umbilical Perf.30 Guns Stuck C.35 Packer does not Set C.39 Set off depth C.42 Stab Seals in GP C.43 Stick Tool Joint BOP.15 BOP BOP.16 BOP C.23 Damage to Ring Grove C.18 Test BOP C.22 Casing Tally C.25 Debris C.26 Fail to Unlatch C.27 First Time on 8501 + 25 ITEMS

S

Low Mod. High

• V. High

Frequency / Probability

• V. High

Risk must be reduced or eliminated. High ALARP : Reduce risk wherever practical. Mod. ALARP : Reduce risk where cost-beneficial. Low Risk broadly acceptable. No action required.

• V. High

High M oderate Low

Im pact Level

Risk Rating Matrix (I mpact vs. Probability)

Define project scope, and decide how to manage risk I dentify a list of threats that can jeopardize the delivery of your project objectives.

(1) Define project scope, and decide how to manage your risk. (2) I dentify a list of threats that can jeopardize the delivery of your project objectives. (3) Agree on the likely consequences and probability of occurrence of each risk and derive a risk rating. (4) Plan actions to mitigate. (5) Execute Risk plans. Validate and follow through on actions to safeguard risk. (6) Capture learning's, and share what happened, what worked, and what went wrong.

RI SK

9

Drilling and Completions Risk Workflow

• What is the I mpact ?
• What is the Probability ?
• Control, I nfluence, React ?

Agree on the likely consequences and probability of occurrence of each risk and derive a risk rating. Plan actions to mitigate.

Execute Risk plans.

Tools - Lessons Learned - AAR Validate and follow through on actions to safeguard risk. Capture learning's, and share what happened, what worked, and what went wrong.

RI SK - Management Tools for Mitigation  “Stop Work” Authority  Job Risk Analysis (JRAs)  Standard Operating Procedures (SOPs)  Pre-Start-Up (PSU) Review  Permits For Work  Hot Work  Confined Space Entry  Trenching & Excavation  Lock Out / Tag Out  Management Of Change (MOCs)  H2S / LEL Management

Expanded Detail Risk/ Mitigation

10

Other Risk Mitigation Tactics

 EHS Management

Systems

 Drill Well on Paper  Operator – Contractor

EHS and Safety / Design Engineering Partnerships

 I nternational

Association of Drilling Contractors (I ADC) Safety Case

 Third Party Engineering

Review and Certification

• f Well Design

11

Time is of the Essence

 Rigs and Service Companies have been I dle for Over

Three Months

 GOM Operators are Currently Planning 2011 and 2012

Capital Expenditures

 The moratorium and changing regulatory environment raise

uncertainty in GOM investments

 Current decisions to re-deploy capital, personnel and equipment are

under consideration

 Rigs and Service Companies have Started to Leave the

GOM

 Contractors are actively seeking multi-year contracts for equipment

and services

 GOM Production will Continue to Decline as a Result of

the Moratorium

 Deepwater projects can take 3-5 years before first production is

realized

12

Recommendations

 Follow Newly Established Practices Outlined by the BOEM  Uphold Standard Regulations and I ndustry Best Practices  Commence Additional Deepwater Operations to I nclude:

 Appraisal, Development and Production wells with known reservoir

characteristics

 Evaluation of Higher Risk Operations on a Well-by-Well

Basis Pending the Findings of the Presidential Commission

13